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The Company revised its preliminary 2013 guidance which was provided on December 20, 2012. The updated guidance reflects lower pension expense associated with the curtailment of the Company’s U.S. defined benefit pension plan, as well as a slightly reduced outlook for 2013 core sales growth of between 1% and 3% (excluding acquisition and foreign exchange impacts). Earnings per share in 2013 are now estimated to be in a range of $4.10 to $4.30, representing an increase of 11%-16% over 2012 earnings per diluted share of $3.70 (before Special Items and on a continuing operations basis, which excludes profits from discontinued operations of $0.05 per share in 2012). The 2013 guidance does not include potential impacts from the pending acquisition of MEI. Excluding inventory step-up and one-time transaction and integration costs, the Company expects MEI to be accretive to earnings within the first year of acquisition by approximately $.25 per share, including $.05 in synergies. The Company expects 2013 free cash flow (cash provided by operating activities less capital spending) to be in the range of $190 - $220 million, including the effect of asbestos related cash flows.

Segment-specific sales and operating profit guidance will be provided at the Company’s Investor Day conference on February 27, 2013.

Please see the Non-GAAP Financial Measures table attached to this press release for supporting details. Additional information with respect to the Company’s asbestos liability and related accounting provisions and cash requirements is set forth in the Current Report on Form 8-K filed with a copy of this press release.

Conference Call

Crane Co. has scheduled a conference call to discuss the fourth quarter financial results on Tuesday, January 29, 2013 at 10:00 A.M. (Eastern). All interested parties may listen to a live webcast of the call at
http://www.craneco.com. An archived webcast will also be available to replay this conference call directly from the Company’s website.

Crane Co. Investor Day

The Company will hold its annual Investor Day conference on Wednesday, February 27, in New York City from 8:30 am to noon and will be available on the web at
www.craneco.com.

Crane Co. is a diversified manufacturer of highly engineered industrial products. Founded in 1855, Crane provides products and solutions to customers in the aerospace, electronics, hydrocarbon processing, petrochemical, chemical, power generation, automated merchandising, transportation and other markets. The Company has five business segments: Aerospace & Electronics, Engineered Materials, Merchandising Systems, Fluid Handling, and Controls. Crane has approximately 11,000 employees in North America, South America, Europe, Asia and Australia. Crane Co. is traded on the New York Stock Exchange (NYSE:CR). For more information, visit
www.craneco.com.

This press release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995.These statements present management’s expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance.Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties.There are a number of factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking statements.Such factors are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and subsequent reports filed with the Securities and Exchange Commission.

CRANE CO.

Income Statement Data

(in thousands, except per share data)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2012

2011

2012

2011

Net Sales:

Aerospace & Electronics

$

176,081

$

171,973

$

701,208

$

677,663

Engineered Materials

46,900

45,037

216,503

220,071

Merchandising Systems

94,160

86,204

371,901

373,907

Fluid Handling

291,884

294,386

1,195,501

1,140,315

Controls

20,763

22,204

93,955

88,413

Total Net Sales

$

629,788

$

619,804

$

2,579,068

$

2,500,369

Operating Profit (Loss) from Continuing Operations:

Aerospace & Electronics

$

39,181

$

38,785

$

156,015

$

145,624

Engineered Materials

3,344

4,562

24,522

29,754

Merchandising Systems

10,447

7,705

33,771

30,337

Fluid Handling

39,247

38,329

148,167

149,803

Controls

2,300

2,336

12,813

11,228

Corporate

(18,336

)

(13,748

)

(64,847

)

(58,201

)

Asbestos Provision

-

(241,647

)

-

(241,647

)

Environmental Provision

-

(30,327

)

-

(30,327

)

Total Operating Profit (Loss) from Continuing Operations

76,183

(194,005

)

310,441

36,571

Interest Income

587

514

1,879

1,635

Interest Expense

(6,717

)

(6,730

)

(26,831

)

(26,255

)

Miscellaneous - Net

(180

)

(452

)

(884

)

2,810*

Income (Loss) from Continuing Operations Before Income Taxes

69,873

(200,673

)

284,605

14,761

Provision for Income Taxes

23,901

(74,991

)

88,416

(8,055

)

Income (Loss) from Continuing Operations

45,972

(125,682

)

196,189

22,816

Profit from Discontinued Operations attributable to common shareholders (a)

-

1,350

3,777

5,693

Gain from Sales of Discontinued Operations attributable to common shareholders (b)

-

-

29,445

-

Profit from Discontinued Operations attributable to common shareholders, net of tax (a)

-

878

2,456

3,700

Gain from Sales of Discontinued Operations attributable to common shareholders, net of tax (b)

-

-

19,176

-

Gain / Profit from Discontinued Operations, net of tax

-

878

21,632

3,700

Net income (loss) before allocation to noncontrolling interests

45,971

(124,805

)

217,821

26,516

Less: Noncontrolling interest in subsidiaries' earnings

327

324

828

201

Net income (loss) attributable to common shareholders

$

45,644

$

(125,129

)

$

216,993

$

26,315

Share Data:

Earnings (Loss) per share from Continuing Operations

$

0.79

$

(2.18

)

$

3.35

$

0.38

Earnings per share from Discontinued Operations

-

0.02

0.37

0.06

Earnings (Loss) per Diluted Share

$

0.79

$

(2.16

)

$

3.72

$

0.44

Average Diluted Shares Outstanding

57,783

57,903

58,293

59,204

Average Basic Shares Outstanding

57,008

57,903

57,443

58,120

Supplemental Data:

Cost of Sales

$

417,569

$

417,950

$

1,708,240

$

1,653,238

Asbestos Provision

241,647

241,647

Environmental Provision

30,327

30,327

Selling, General & Administrative

131,505

123,885

539,755

538,586

Repositioning Charges

4,531

-

20,632

-

Depreciation and Amortization **

14,141

15,735

57,263

62,943

Stock-Based Compensation Expense

4,459

3,840

17,319

14,972

* Primarily related to the sale of a building and the divestiture of a small product line in the three months ended March 31, 2011.

** Amount included within cost of sales and selling, general & administrative costs.

(a) Amounts represent the operating profit, and after-tax profit, from the Houston Service Center and Azonix Corporation businesses divested in June 2012.

(b) Amounts represent the pre-tax and after-tax gains from the June 2012 sales of both the Houston Service Center and the Azonix Corporation.

CRANE CO.

Condensed Balance Sheets

(in thousands)

December 31,

December 31,

2012

2011

ASSETS

Current Assets

Cash and Cash Equivalents

$

423,947

$

245,089

Accounts Receivable, net

333,330

349,250

Current Insurance Receivable - Asbestos

33,722

16,345

Inventories, net

352,725

360,689

Other Current Assets

36,797

60,859

Total Current Assets

1,180,521

1,032,232

Property, Plant and Equipment, net

268,283

284,146

Long-Term Insurance Receivable - Asbestos

171,752

208,952

Other Assets

455,530

497,377

Goodwill

813,792

820,824

Total Assets

$

2,889,878

$

2,843,531

LIABILITIES AND EQUITY

Current Liabilities

Notes Payable and Current Maturities of Long-Term Debt

$

1,123

$

1,112

Accounts Payable

182,731

194,158

Current Asbestos Liability

91,670

100,943

Accrued Liabilities

220,678

226,717

Income Taxes

15,686

10,165

Total Current Liabilities

511,888

533,095

Long-Term Debt

399,092

398,914

Long-Term Deferred Tax Liability

36,853

41,668

Long-Term Asbestos Liability

704,195

792,701

Other Liabilities

310,474

255,097

Total Equity

927,376

822,056

Total Liabilities and Equity

$

2,889,878

$

2,843,531

CRANE CO.

Condensed Statements of Cash Flows

(in thousands)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2012

2011

2012

2011

Operating Activities:

Net income attributable to common shareholders

$

45,644

$

(125,129

)

$

216,993

$

26,315

Noncontrolling interest in subsidiaries' earnings

327

324

828

201

Net income before allocations to noncontrolling interests

45,971

(124,805

)

217,821

26,516

Asbestos Provision

-

241,647

-

241,647

Environmental charge

-

30,327

-

30,327

Gain on divestiture

-

-

(29,445

)

(4,258

)

Restructuring - Non Cash

1,078

-

3,855

-

Depreciation and amortization

14,141

15,735

57,263

62,943

Stock-based compensation expense

4,459

3,840

17,319

14,972

Defined benefit plans and postretirement expense

5,321

1,959

20,090

6,770

Deferred income taxes

30,583

(66,574

)

55,000

(43,923

)

Cash provided by (used for) operating working capital

81,146

34,957

1,824

(41,955

)

Defined benefit plans and postretirement contributions

(1,041

)

(31,059

)

*

(5,504

)

(48,113

)

Environmental payments, net of reimbursements

(2,115

)

(799

)

(13,371

)

(9,534

)

Other

(6,134

)

(366

)

(12,139

)

(6,303

)

Subtotal

173,409

104,862

312,713

229,089

Asbestos related payments, net of insurance recoveries

(17,906

)

(20,044

)

(77,957

)

(79,277

)

Total provided by operating activities

155,503

84,818

234,756

149,812

Investing Activities:

Capital expenditures

(9,364

)

(7,034

)

(29,308

)

(34,737

)

Proceeds from disposition of capital assets

4,184

73

6,438

4,793

Payment for acquisition, net of cash acquired

-

(996

)

-

(36,590

)

Proceeds from divestiture

480

-

54,079

1,000

Total provided by (used for) investing activities

(4,700

)

(7,957

)

31,209

(65,534

)

Financing Activities:

Dividends paid

(15,976

)

(15,035

)

(61,974

)

(56,992

)

Reacquisition of shares on open market

-

(30,000

)

(49,991

)

(79,999

)

Stock options exercised - net of shares reacquired

4,630

3,295

13,056

23,232

Excess tax benefit from stock-based compensation

370

391

3,603

6,097

Change in short-term debt

-

333

-

(1,003

)

Total used for financing activities

(10,976

)

(41,016

)

(95,306

)

(108,665

)

Effect of exchange rate on cash and cash equivalents

3,584

(1,939

)

8,199

(3,465

)

Increase (decrease) in cash and cash equivalents

143,411

33,906

178,858

(27,852

)

Cash and cash equivalents at beginning of period

280,536

211,183

245,089

272,941

Cash and cash equivalents at end of period

$

423,947

$

245,089

$

423,947

$

245,089

* Includes a $30 million discretionary pension contribution.

CRANE CO.

Order Backlog

(in thousands)

December 31,

September 30,

June 30,

March 31,

December 31,

2012

2012

2012

2012

2011

Aerospace & Electronics

$

378,152

$

392,862

$

423,282

$

437,822

$

410,794

Engineered Materials

12,689

11,357

13,884

11,129

11,110

Merchandising Systems

14,686

19,957

23,587

30,033

15,212

Fluid Handling

326,863

330,824

334,696

337,538

*

313,715

*

Controls

16,507

17,296

16,187

29,770

**

27,120

**

Total Backlog

$

748,897

$

772,296

$

811,636

$

846,292

$

777,951

* Includes Order Backlog of $2.9 million at March 31, 2012 and $1.9 million at December 31, 2011 pertaining to a business divested in June 2012.

** Includes Order Backlog of $11.3 million at March 31, 2012 and $9.6 million at December 31, 2011 pertaining to a business divested in June 2012.

Special Items impacting Net Income (Loss) Attributable to Common Shareholders:

Repositioning Charges - Net of Tax (a)

3,896

16,724

Per Share

$

0.07

$

0.29

Asbestos Provision - Net of Tax (b)

157,071

157,071

Per Share

$

2.71

$

2.65

Environmental Provision - Net of Tax (c)

19,713

19,713

Per Share

$

0.34

0.33

Non-deductible Acquisition Transaction Costs (d)

3,874

3,874

Per Share

$

0.07

$

0.07

Gain on Divestitures - Net of Tax (e)

(19,176

)

Per Share

$

(0.33

)

Net Income Attributable To Common Shareholders Before Special Items

$

53,414

$

51,654

$

218,416

$

203,098

3.4

%

7.5

%

Per Diluted Share

$

0.92

$

0.88

$

3.75

$

3.43

5.3

%

9.2

%

Profit from Discontinued Operations attributable to common shareholders, net of tax (f)

-

(878

)

(2,456

)

(3,700

)

Per Share

$

(0.01

)

$

(0.04

)

$

(0.06

)

Net Income Attributable To Common Shareholders Before Special Items from Continuing Operations

$

53,414

$

50,776

$

215,960

$

199,398

Per Diluted Share

$

0.92

$

0.86

$

3.70

$

3.37

7.1

%

10.0

%

In the three months ended December 31, 2011, Average Shares Outstanding excluding the effect of diluted stock options were used to compute the per share amounts since this period was in a loss position. Had Net Income Attributable To Common Shareholders been reported for this period, Average Shares Outstanding would have included the effect of diluted stock options when computing per share amounts (see chart below).

Average Basic Shares Outstanding

57,903

Effect of Diluted Stock Options

915

Average Shares Outstanding including the effect of Stock Options

58,818

(a) The Company incurred repositioning charges in the second quarter, third quarter and fourth quarter of 2012, associated with productivity actions. The charges included severance and impairment costs related to the shutdown of certain facilities, the transfer of certain manufacturing operations, staff reduction actions and a pension curtailment charge.

(b) During the three months ended December 31, 2011, the Company recorded an Asbestos Provision.

(c) During the three months ended December 31, 2011, the Company recorded a charge related to an increase in the Company's expected liability at its Goodyear, AZ Superfund Site.

(d) During the three months ended December 31, 2012, the Company recorded non-deductible transaction costs associated with the potential acquisition of MEI.

(e) In June 2012, the Company divested of a business within the Fluid Handling segment (Houston Service Center) and a business within the Controls segment (Azonix Corporation). The associated gains were included in the “Gain from Sale of Discontinued Operations attributable to common shareholders, net of tax" section on the accompanying Income Statement Data. In September 2012, the Company recorded a favorable price adjustment associated with the Azonix Corporation divestiture.

(f) Amounts represent the after-tax profit from the Houston Service Center and Azonix Corporation businesses divested in June 2012.

Certain non-GAAP measures have been provided to facilitate comparison with the prior year.

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that non-GAAP financial measures which exclude certain non-recurring items present additional useful comparisons between current results and results in prior operating periods, providing investors with a clearer view of the underlying trends of the business. Management also uses these non-GAAP financial measures in making financial, operating, planning and compensation decisions and in evaluating the Company's performance.

In addition, Free Cash Flow provides supplemental information to assist management and investors in analyzing the Company’s ability to generate liquidity from its operating activities. The measure of Free Cash Flow does not take into consideration certain other non-discretionary cash requirements such as, for example, mandatory principal payments on the Company's long-term debt. Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.

Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in the context of the definitions of the elements of such measures we provide and in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.

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